German State Mulls New Tax Data Disc Purchase

29.07.2010

Tax authorities in the German state of Schleswig-Holstein have reportedly been offered a new tax data disc, allegedly containing information on around a hundred German clients suspected of having evaded taxes through accounts with Liechtenstein Landesbank (LLB), amounting to an estimated EUR500m.

It is believed that the authorities in Kiel intend to purchase the disc following sample analysis of the data. While this has already been discussed and agreed with the federal finance ministry, a final decision regarding the purchase has as yet not been made.

It is believed that tax authorities in Germany are currently dealing with at least seven such cases of tax data discs. Indeed, only very recently tax investigators carried out raids on a total of 13 branches of the Swiss banking giant Credit Suisse in Germany, where employees are alleged to have helped over 1,000 German clients evade taxes, following the decision by the German state of North Rhine-Westphalia back in February to purchase a tax disc for around EUR2.5m. It is thought that in the region of EUR400m in additional revenues will be generated as a result of information contained on the disc. Thousands of individuals have already come forward voluntarily to provide self-declarations in a bid to be granted leniency.

Following months of indecision and deliberation, the German government announced its decision in June to jointly purchase with the federal state of Lower Saxony a stolen tax data disc, containing the names and details of more than 20,000 Germans alleged to have evaded taxes in Switzerland. Initially offered to the German state of Baden-Württemberg back in February, the controversial disc, purchased for EUR185,000 (negotiated down from EUR500,000), is also now in the hands of tax investigators.

Bowing to pressure from the Free Democratic Party and given unresolved legal concerns, Baden-Württemberg’s state government elected not to purchase the disc at the time. Marking an about-turn, however, the state government is now eager to make full use of the data contained on the disc. Tax authorities are anticipating additional revenues amounting to tens of millions of euros.